AMLP shareholders need to be aware of the possibility that all assets in the Fund may eventually incur the 35% corporate tax rate if held long enough:

All capital gains of AMLP are liable for the 35% federal corporate tax.

Distributions AMLP receives from the MLPs it holds are not traditional dividends but consist primarily of “return of capital” which will be taxed at the 35% federal corporate tax rate when sold.

Once the cost basis of an MLP holding reaches $0, which is typically about 12-13 years for an MLP yielding 8%, all future distributions AMLP receives from that MLP will be current-year taxable at the 35% federal rate.

Once the cost basis of an MLP holding reaches $0, all of its value (100%) then represents a capital gain that will face the 35% federal corporate tax when realized.

All of the above is before shareholders incur their own tax liabilities for buying, holding, and selling shares of AMLP. Remember, distributions that shareholders receive from AMLP are not tax-free dividends. Approximately 85% of those distributions are tax-deferred return of capital.

Disclosure covering writer, editor, and publisher: I am not a tax advisor, but I can usually recognize double taxation when I see it. No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.